Anomalies of Banking Intermediation and Profit Growth (Study on the 10 Largest Banks in Indonesia (original) (raw)
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Objective-One of the bank's main goals is to obtain profit mainly from the intermediation process. The implementation of the Indonesian banking intermediary function in the year 2017 is not optimal, as indicated by credit growth in the year 2017 which only reached 8,35%. This phenomenon also occurs in the 10 largest banks in Indonesia. In 2017 the intermediation function has decreased but profits have increased. The aim of this study is to analyze the influence of banking intermediation on profit growth and whether credit quality and operational efficiency affect profit growth. An indicator of banking intermediation is a loan to deposits ratio (LDR), credit quality with non-performing loans (NPLs), the operating efficiency with the ratio of operating expense to operating income (OEOI) and profit growth is measured by the amount of profit. Methodology-Descriptive and verification methods will be used in this study, with data from the 10 largest banks financial statements in Indonesia for the period 2016-2017 while data analysis uses multiple linear regression. Findings-The findings of this study show that partially LDR has a positive effect although the effect is not significant on Profit; NPLs have a negative effect on Profit and the effect is significant; OEOI has a negative effect even though the effect is not significant on Profit; Simultaneously, the variable LDR, NPLs, OEOI have a significant effect on profit. Novelty-Compared to previous studies, bank profit growth is not only influenced by banking intermediation, but if banks can maintain credit quality and improve operational efficiency, bank profits will grow Type of Paper: Empirical Keywords: loan to deposit ratio, non-performing loans, the ratio of operating expenses to operating income, profit growth.
BANKING INTERMEDIATION, OPERATIONAL EFFICIENCY AND CREDIT RISK IN THE BANKING PROFITABILITY
The aim of this study was to analyze the factors that affect the banking profitability, including banking intermediation, operational efficiency and credit risk. The method used is descriptive and verification method, with secondary data from financial statements 26 all over Indonesian Regional Development Bank as a research object units. Data analysis technique is the multiple linear regression, hypothesis testing while using T - test to examine the effect of partial variables and F - test to examine the effect of variables simultaneously with a significance level of 5 %. Based on the results, it is concluded that the partial, loan to deposit ratio (LDR) has negative effect but no significant effect to the return on assets (ROA); Operating expenses to operating income (OEOI) has negative and significant effects to the return on assets (ROA); While the nonperforming loans (NPLs) has positive effect but no significant effect to the return on assets (ROA). Simultaneously that variable of LDR, OEOI and NPLs significantly influence to ROA variable with the level of 57.1%, while the remaining 42.9% thought to be influenced by other variables not examined in this study. Keywords: loan to deposit ratio, non-performing loans, ratio of operating expenses to operating income, return on assets.
International Conference on International Business, Marketing and Humanities (ICIBMAH2017), 2017
The aim of this study is to analyze the determinants of financial intermediation efficiency including credit growth (CG), funds structure and credit risk. And its impact on profitability. Financial intermediation efficiency is measured by net interest margin (NIM), funds structure is measured by ratio time deposits to total third party funds (STPF), credit risk is measured by non performing loans (NPLs) and profitability is measured by return on assets (ROA). The methods used are descriptive and verification methods, with secondary data from financial statements of Bank BTN period 2010 – 2016. The data analysis technique used is multiple linear regression, while hypothesis testing uses T - test to examine the effect of partial independent variables and F - test to examine the effect of independent variables simultaneously. Based on the research results, it is concluded that partially, CG has positive but not significant effect on NIM and STPF have positive and significant effect on NIM; while the NPLs have negative effect but not significant on NIM; Simultaneously, CG, STPF, and NPLs significantly influence NIM with the level of 62.9%, while the remaining 37.1% is influenced by other variables. And NIM has positive and significant effect on ROA with the level of 78.3%, while the remaining 21.7% is influenced by other variables not examined in this study.
The aim of this study was to analyze the factors that affect the implementation of banking intermediation include capital, operational efficiency, credit risk and profitability. The methods used are descriptive and verificative, with secondary data from financial statements all over 26 Indonesian Regional Development Banks as a research object’s units. Data analysis technique is the multiple linear regression, hypothesis testing while using t - test to examine the effect of partial variables and test - F to examine the effect of variables simultaneously with a significance level of 5 %.Based on the results it is concluded that partial OEO Iand ROA have positive and significant effects on LDR. CAR has positive but no significant effects on LDR. While the NPLs has negative but no significant effect on LDR. Simultaneously CAR, OEOI, NPL and ROA significantly influence the level of influence of LDR with 52.69% and the remaining influenced by other factors not examined. Keywords: Capital adequacy ratio; CAR; loan to deposit ratio; LDR; non-performing loans; NPLs; operating expense to operating income ratio; OEOI; return on assets; ROA
RePEc: Research Papers in Economics, 2014
This study discusses the influence of a series of bank-specific factors such as CAR (Capital Adequacy Ratio), OEOI (Operations Expences to Operations Income), NPL (Non Performing Loan), and FBI (Fee-based Income) on ROA as a profitability proxy. Also studied whether commercial banks probability affected by the concentration (Structure Conduct Performance, SCP) or efficiency (Efficiency Hypothesis, HE). Share of Third Party Funds (STPF) is variable proxy of SCP, while the OEOI proxy of HE. By using panel data procedures of the 111 commercial banks during 2005 to 2011, this research concludes that CAR and FBI have significant effect with positive sign on ROA, while OEIO and NPL significant with negative sign. STPF does not significantly affect on ROA so SCP theory as a proxy for the concentration is rejected, on the other hand, this research accepts the HE theory that focuses on the efficiency.
IJ JM Ilomata International Journal of Managemen, 2020
This study aims to determine and analyze the effect of lending and placement of funds in other banks on the ability of banks to increase profitability. The study was taken data from one of the XYZ micro banking institutions in West Sumatra, based on year-end financial data from 2009 to 2019. This research uses a quantitative approach. The data source used is secondary data in the form of financial statement data for micro banking institutions for 11 (eleven) years. The data analysis method uses the Ordinary Least Square (OLS) method. The results showed that partially lending had a negative and significant effect on increasing profitability, placement of funds in other banks had a negative and insignificant effect on the increase in profitability of XYZ micro banking. Simultaneously, the variable of credit distribution and placement of funds in other banks has a significant effect on the increase in profitability of the XYZ micro banking institution.
The aim of this study was to analyze the factors that affect the implementation of banking intermediation include Capital, Net Interest Margin, Credit Risk and Profitability. The methods used are descriptive and verificative, with secondary data from financial statements all over 26 Indonesian Regional Development Banks as a research object’s units. Data analysis technique is the multiple linear regression, hypothesis testing while using t - test to examine the effect of partial variables and test - F to examine the effect of variables simultaneously with a significance level of 5 %. Based on the results it is concluded that partial NIM and ROA have positive and significant effects on LDR. NPL has positive effect but no significant effect to LDR. While the CAR has negative effect but no significant effect to LDR. Simultaneously CAR, NIM, NPL and ROA significantly influence the level of influence of LDR with 40.5 % while the remaining 59.5% thought to be influenced by other variables not examined in this study. Keywords: Capital Adequacy Ratio; CAR; Loan to Deposit Ratio; LDR; Net Interest Margin;NIM; Non- Performing Loans; NPLs; Return on Assets; ROA .
Objective-A Bank is a financial institution that collects and distributes funds to the public to obtain Profitability. The Covid-19 pandemic has affected the economic sector, especially the banking sector. The intermediation function needs to run optimally, increasing investment in secondary reserves, decreasing operational efficiency, increasing credit risk, and reducing bank profitability. The research aimed to determine the effect of Banking Intermediation, Secondary Reserves, Operational Efficiency, and Credit Risk on Profitability at Regional Development Banks in Indonesia for the 2019-2022 period, partially and simultaneously. Banking Intermediation is measured by the ratio of credit to total third-party funds (Loan to Deposit Ratio/LDR), Secondary Reserve is measured by the percentage of securities held to third-party funds (TPF), Operational Efficiency is measured by the ratio of operating expenses to operating income (OEOI), Credit Risk is measured by Non-performing Loans (NPLs), and Profitability is measured by Return on Assets (ROA). Methodology-Descriptive and verification methods with a quantitative approach will be used in this study with secondary data from published financial reports from 22 Regional Development Banks in Indonesia. The data analysis technique used is multiple linear regression. Findings-The study's findings show that partially LDR has a positive and significant effect on ROA; Secondary reserve has a positive but not significant impact on ROA; OEOI and NPLs ratios have a negative and significant effect on ROA. While simultaneously, LDR, Secondary Reserve, OEOI Ratio, and NPLs substantially impact ROA. Novelty-Compared to previous studies, bank profitability is not only influenced by banking intermediation, operational efficiency, and credit risk but also by secondary reserves, although not significantly.
The Effect Of Capital Adequacy Ratio and Loan To Deposit Ratio on Banking Profitability
BINA BANGSA INTERNATIONAL JOURNAL OF BUSINESS AND MANAGEMENT, 2021
The objective of this research is to analyses the influence of Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), Size, Operations Expenses to Operations Income (BOPO), toward Profitability of Domestic Banks and Foreign Banks in January 2003 until December 2007. This research also used Chow Test to analyses the influence of Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), Size, Operations Expenses to Operations Income (BOPO), toward Profitability between State Owned Banks and Foreign Banks. This research used time series data from Bank Indonesia’s three-monthly domestic Banks and Foreign Banks published financial reports. After passed the purposive sampling phase, the number of valid samples is 10 Domestic Banks and 10 Foreign Banks. This research used multiple regression analysis to analyses the data. This research also used Chow Test to analyses the influence of Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), Size, Operations Expenses to Operations Inc...
Banking Profitability: How does the Credit Risk and Operational Efficiency Effect?
The aim of this study was to analyze the effect of credit risk and operational efficiency to the banking profitability. Credit risk as measured by non performing loans (NPLs), operational efficiency as measured by ratio of operating expense to operating income (OEOI) and banking profitability as measured by return on assets (ROA). The method used is descriptive and verification method, with secondary data from financial statements of 26 Regional Development Bank in Indonesia as a research object units. Data analysis technique is the multiple linear regression, hypothesis testing while using T - test to examine the effect of partial variables and F - test to examine the effect of variables simultaneously with a significance level of 5 %. Based on the results, it is concluded that the partial, NPLs has positive and significant effect to ROA; While the OEOI has negative and significant effects to the ROA Simultaneously that variable of NPLs and OEOI significantly influence to ROA variable with the level of 57.1%, while the remaining 42.9% thought to be influenced by other variables not examined in this study. Keywords: non-performing loans (NPLs), ratio of operating expenses to operating income (OEOI), return on assets (ROA)